Stocks climb, breaking losing streak
Apple stock soared, helping propel major US stock indexes to gains after a solid week of losses. The Dow Jones rose 135 points to close at 12504.
Apple — the world's most valuable company, the innovator that revolutionized the cell phone — climbed nearly 6 percent on Monday, helping propel major U.S. stock indexes to gains after a solid week of losses. The Standard & Poor's 500, where Apple accounts for 4 percent of the index, enjoyed its best day in nearly five weeks. The Nasdaq composite index, where Apple accounts for an even heftier 12 percent, notched its biggest gain of the year.
And it was no thanks to Facebook. The social networking giant, on its second day as a public company, plunged 11 percent even as the rest of the market rallied.
It was tough to pin down any surefire reason for Facebook's stock decline. It did go public during the market's worst week of the year so far, and finished Friday just 23 cents above its opening price of $38. But that didn't explain Monday's plunge.
Investors also may have been spooked by technical glitches that marred trading right after it opened. But again, those issues appeared to be cleared up by Monday.
Apple is also no stranger to fickle investors. Its stock soared 57 percent from the end of last year through April 9, climbing to more than $636 from $405 as iPhone sales seemed unstoppable. Then it fell for most of April and May, declining to about $530 on Friday, partly because investors are worried that phone companies will grow tired of subsidizing the expensive phones to sell to customers.
But Monday's gain of $30.90 to $561.28 — its second-biggest climb of the year so far — came after several analysts said they expect the iPhone business to continue to do well.
That was welcome relief after a month that has been crippled by Greece, which failed to elect a new government two weeks ago and is teetering close to leaving the euro.
Investors desperate for good news latched on to weekend statements from China's Premier Wen Jiabao, who promised to boost the country's growth, a shift from previous rhetoric that focused mainly on curbing inflation.
That drumbeat of bad news about Europe continued, but Apple helped investors shrug it off. The weekend's Group of Eight meeting of world leaders brought only an ambiguous conclusion, producing promises to pursue growth in Europe but little in the way of concrete plans for how to do so.
Caterpillar, which is heavily reliant on demand from China, climbed nearly 4 percent to $91.98, just its fourth gain in May. Several big-name financial firms, including Bank of America and Morgan Stanley, declined; bank stocks tend to fall when investors are concerned about Europe because of the banks' investments there. JPMorgan Chase, still smarting from an embarrassing trading loss, fell 3 percent to $32.51 after announcing it will halt plans to buy back its own stock.
Monday was the Dow's first gain after six straight days of losses, and only its third up day for May. Last week was the worst for the Dow since November. The month has wiped out nearly three-fourths of the Dow's first-quarter gains.
It wasn't clear if Monday's gains in the U.S. represented a corner turned or a temporary moment of relief. Tension over Europe still flowed freely.
Germany's deputy finance minister derided a plan pushed by the new French president that would require Germany and other stronger European countries to fund "Eurobonds" to prop up weaker countries like Greece and Portugal. Bankia, a bank nationalized by the Spanish government, was ordered to come up with more money for possible bad loans.
If anything, investors are growing more worried that the European debt problems "might not be as manageable as they previously believed," said Clark Yingst, chief market analyst for investment banking firm Joseph Gunnar in New York. "Today's rally has nothing to do with what is evolving around Greece."